Top 5 Techniques to Reduce Manufacturing Costs
Energy Efficiency
Most of the time without our notice we tend to waste a lot of electricity. Implementing sensors that would stop the machines immediately after usage can reduce quite a lot of costs. Replacing energy-guzzling machinery with those consuming less energy can save up to 10% of the cost. Usage of alternative energy sources like solar energy which is the cheapest source of energy can cut down operating costs significantly.
Fixed Cost Reduction
Machinery for a manufacturing industry is very important, but only a few types of machinery are constantly used. Hence, owning the machinery that is used passively wouldn’t be feasible; renting/leasing such machinery can reduce the fixed cost. Using automation in the production process can decrease the labor cost abundantly. Outsourcing advertising, marketing, and sales could also help in cost reduction.
Overhead Cost Reduction
Maintaining inventory by not over-producing and recycling/selling the wastage or scrap of the raw material can always free up and manage the factory space and reduce wastage. At times, outsourcing supply can reduce the business space, risk, staff, maintenance of vehicles. Buying raw materials in bulk and sharing it with another manufacturer can reduce the material and inventory space. Intercom and internet calling, conferencing, and video calling meetings can help reduce administrative costs.
Reduction in Labour Costs
Usage of technology for the manufacturing process like implementing sensors and automation, robotics can drop down as the number of laborers drops as the automation requires less human interference and is more accurate. Using part-time workers and freelancers can eliminate the idle time of laborers. Implementing methods to increase efficiency; comfortable positive workplace, eliminating overtime as it reduces efficiency, training employees, getting to know the employees, re-skilling the employees rather than assigning them monotonous tasks can help the manufacturer make optimum use of the labor force.
Customer Related Cost Reduction
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